June 11, 2007
Rolling Stone founder keeps things fun
By David Lieberman, USA Today
NEW YORK — Forty years after founding Rolling Stone, Jann Wenner still prides himself on a keen sense for what’s on the cutting edge of pop culture.
So you might be not believe what medium excites the chairman and president of Wenner Media most in this era of revolutionary new options on broadband and cellphones.
Wenner — who helped launch writers Hunter S. Thompson and Tom Wolfe and photographer Annie Leibovitz — still likes old-fashioned, ink-and-paper magazines.
“What does the magazine do better than any other medium?” he asks. “It does photography better. It does layouts better. It does long reads better. You can have a point of view. And if you do those things well, you’ll have an audience that’s loyal and steady — and the advertisers will follow.”
Wenner, 61, has good reason to be upbeat. His privately held company is one of publishing’s most intriguing success stories.
Gross ad sales at his three magazines, including Us Weekly and Men’s Journal, collectively were up 19% to nearly $674 million last year, according to Publishers Information Bureau data. (The total includes sales commissions that the company doesn’t collect.)
And this year is off to a strong start. Gross ad sales at the three magazines were up 20%, to $135.8 million, in the first quarter vs. the same period last year.
That’s remarkable considering the magazine industry overall saw ad sales rise just 3.8% last year and 6.9% in the first quarter.
“It’s a tough environment out there,” Wenner says. “In the last 20 years we’ve had cable TV and now the Internet. That makes the overall competition tougher than ever for people’s share of mind and attention.”
Wenner, who helped found the Rock and Roll Hall of Fame, says he has thrived by trusting his gut. Instead of basing editorial and business decisions on readership surveys or financial reports, he considers what he likes and — as important — what would be fun.
The result is sometimes choices that would baffle traditional business strategists.
“Here’s what I’ve done wrong,” Wenner says. “We have three magazines with much different audiences, different formats, different publishing frequencies and they all have different printers. I never thought about those things until after the fact.”
He defied conventional business wisdom on other occasions by rejecting opportunities to expand his magazine empire or diversify into other realms.
For example, around 1981 he turned down an offer to merge Rolling Stone with MTV in exchange for 25% of the company.
“If I had done that deal, I wouldn’t have had any enjoyment, and I would have sold the stock,” he says. “I would never have had the foresight to say, ‘I should hold the stock because someday Sumner Redstone will build this up and it will be worth $3 billion.’ So I don’t regret that. I would not have thrived under an enterprise like MTV.”
As it worked out, he says, he still has plenty of time for his four children, and to ski and travel.
His job also has non-financial perks: He flew to Amsterdam to interview Bob Dylan for Rolling Stone’s anniversary issue. (Wenner took his magazine’s name from Dylan’s 1965 classic Like a Rolling Stone.)
That’s why he scoffs at frequent speculation that he’s gearing up to sell Wenner Media, which doesn’t have an heir apparent. “Why would I sell? I’ve got the most enjoyable job, and I’m having the greatest time doing it.”
His desire for control occasionally may seem excessive. For example, he insists on neat desks.
“I think if you’ve got a messy office, you must have a messy mind,” he says. “If I walk down the hallway of the company I own, this is the way I want it to look. And I think it makes a good environment for everybody.”
No question, Wenner’s having a ball being a celebrity executive — one whose name frequently shows up in gossip columns. Gossip also is paying off handsomely for his company with the success of Us Weekly, a bimonthly he bought in 1986 and converted to a weekly in 2000 to take on Time Warner’s People and American Media’s Star.
“Nobody had ever competed with those two,” he says. “Star was still in scandal mode. People was running stories about nuns falling down wells and Cher and Elizabeth Taylor. Meanwhile, this new generation is coming along with new style, new attitudes. And we tapped it.”
Us now accounts for about 60% of Wenner Media’s revenue after two years of about 35% annual ad sales growth, and 19% growth in the first quarter of 2007. Circulation, at 1.75 million, is up 106% since late 2001. Total readership is up 192% to 11.1 million, according to Mediamark Research.
Few predicted it would be such a hit. Industry watchers also scratched their heads in 2001 when Wenner sold half of the magazine to Disney for $30 million — an odd development considering the entertainment giant had just dumped its magazine assets, including Fairchild Publications and Los Angeles Magazine.
“That had a few people thinking I was insane,” former Disney CEO Michael Eisner says. “It was only because of Jann. Solely and completely. And I liked the idea (of competing) in what was perceived to be a decaying industry. Now that I think about it, it was probably pretty stupid.”
He can laugh now. Last year Wenner bought back Disney’s share in the magazine for $300 million. “It turned out unbelievable — probably the biggest increase in value of anything Disney’s ever done, except for maybe the overall corporation,” says Eisner.
Meanwhile, Wenner has kept Rolling Stone growing by balancing articles that appeal to college students with those for baby boomers. In addition to the stories about pop music, he says, both groups key into the magazine’s sharp-edged coverage of politics and current events.
“It presents serious news in a more compelling way,” he says. “The interpretation and deeper look into what’s important to the country at large — that discussion is taking place more in Rolling Stone than it has in Time magazine for the last five or six years.”
He’s also optimistic about Men’s Journal, which has been growing steadily but not as quickly as Wenner’s other magazines. The company plans an ad campaign to promote its attention to adventurous lifestyles, as opposed to fashion and fitness.
Wenner’s even starting to warm up to the Internet. He plans to add a social networking feature to RollingStone.com, which now offers news, reviews and audio or other supplements to the magazine’s features.
Meanwhile, Us recently introduced a video channel on its site and on Eisner’s Veoh.com.
“Scanning the Internet, looking for information, bits and pieces — it’s great. You can skip around,” Wenner says. “But it’s like: 57 channels and there’s nothing on. And reading is not going away.”